A bad decade financially? Not really...

An example is the turn to 2010. Financial writers posted their first stories of the new year, all about the decade from 2000-2009.

Everywhere I turn there are articles with titles like "The Lost Decade" talking about how it was the worst decade in modern stock market history going back to 1830, to the worst since the Stone Age when they used to count how many rocks each family had.

Ok, first thing: the last decade stunk. Job growth was really crummy, income growth for most Americans non-existent. The stock market went sideways for a decade.

All true. But in terms of the investing side, do you know that the typical person in a 401k plan made money? It's true. Do you know that someone who just put money in, steady as you go, made money?

Here's why. You can look at investing as something frozen in time: on the first day of January that the markets were open in 2000, somebody put in a lump sum of money and just let it sit for ten years.

But most people don’t do that. What most people do is they have a retirement plan at work and money goes in from every paycheck. If you look at it that way and you look at how money is added paycheck by paycheck, somebody who put money in over the last decade, how much money do they have?

I have an article from the February issue of Money Magazine. In it, they show that if somebody put in money over time in a typical investment allocation for somebody who's under age 40 - 80% in stocks, 20% in bonds - at the end of the ten year period, they end up with their money almost tripled!

The big message I want you to think about with your 401k, IRA, Roth account or regular investment account, is this: don't lose your nerve. You can't go and hide under a rock. It doesn't work. It doesn't build financial security over time.

It is so key to have a well-diversified plan and fund it steady as you go. Don't let short term disasters throw you off your mark.

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